Market Recap: Oil, Energy Prices Send Stocks Tumbling


Market Recap for week of 1/19—1/23

After weeks of focusing primarily on falling oil prices, this week’s big story was the start of quantitative easing in Europe. Much like we did here in the U.S., the European Central bank is pumping this “easy money” into their economy to stop the bleeding, so to speak, in terms of deflation and the growing threat of recessions in European economies.

Monday the markets were closed in observation of Martin Luther King Day.

Tuesday the market was down early as a result of oil price declines and poor 4th quarter earnings numbers from Johnson & Johnson. After falling nearly 200 points in the early part of the session, the market would rebound on a strong day for the technology sector. When all was said and done, after all the single day volatility, the Dow closed up 3 points.

Wednesday saw the market stay relatively flat most of the day. Early numbers were slightly lower after a disappointing IBM earnings report, but the market made up those losses with the uptick in oil prices. For the day, the Dow finished up 39 points.

Thursday was the day the markets were waiting for, as the European Central Bank (or ECB) unveiled its plans for bond buying or quantitative easing. ECB President Mario Dragi announced that starting in March, the bank would purchase 60 billion euros per month (which is about $70 billion dollars) in bonds, in an attempt to reverse the deflation currently sending European economies into recession. The markets reacted favorably, and the Dow closed up 259 points.

Friday investors resumed their focus on energy prices and oil—which dropped 2% on the day. Stocks remained relatively even for much of the day, but concerns grew as the end of trading approached. Energy sector leader Exxon Mobil was the day’s biggest loser, as the Dow finished the day down 141 points.


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